For years, double-digit TV upfront price inflation has been as common as pre-COVID handshakes or slaps on the back. But what about surging consumer price inflation? No sign yet.
This year, we know the other side of the story -- where actual U.S. price inflation for consumers is now at an alarming 8.5% in March.
Three months ago, overall media inflation was projected to lag consumer price inflation. But perhaps not for TV.
TV's upfront marketplace is its own animal. And based on the supply-and-demand trend of the past three decades, it is way up.
Pick a double-digit increase -- 10%, 15%, or 20% -- and you will be probably be in the ballpark.
The upfront ad market -- sometimes called a "futures" market by some -- focuses on looking far out, 16 months or longer.
The lure is to buy ahead of the TV season and to pay 50% to 75% less than you would nearer to time of air, in the quarterly scatter markets.
Marketers have long sought an alternative -- with the emphasis on "sought."
Marc Pritchard, chief brand officer of Procter & Gamble, has long called for a better TV upfront-scatter market scenario -- something more akin to what he sees on the digital media side of things: Buying closer to airtime, with nary a sign of a "makegood" obligation.
That doesn’t seem possible -- at least not for regularly scheduled, scripted and unscripted linear TV programming on broadcast and cable, which continues to shrink in viewership size.
Demand still works in the TV networks' favor. That's because TV's reach -- although it continues to shrink -- is still desired.
So the bigger question is whether new streaming platforms can take up the slack now -- and increasingly in the future -- with expected, expanded levels of ad inventory.
Right now, we don't see much of that growing quickly.
ECI Media Management estimates digital ad prices in North America are expected to be 5.4% more expensive this year.
The same group says overall U.S. TV ad price inflation will rise by around 15%, while overall U.S. inflation rate is expected to average 7% for this quarter.
Do the math. TV price inflation continues to outpace all others.